Lines in the sand

If you'd asked me a month ago what changes I'd start to enact at BFC with magic wands, I'd likely have said buy out Conway and Lee, sack Asbaghi, sack the CEO and take actions to stabilise the clubs finances to be able to complete the first league 1 campaign.

So out of 5 "wishes", 3 have occurred. That's a good start and the hardest one has been achieved to some degree. The 2022/23 season has more hope around it just by getting rid of those three chancers/losers.

I'm happy to give everyone involved a blank slate. The last 4.5 years have had far too much turmoil and controversy and I feel we just need some progressive years. Ones where things are steadily and incrementally improving and the club is getting better at every level, with every task, with every intent. That we get the basics done properly.

There will still be change and comings and goings, it's 21st century football club, it's part of the modern age, so it's natural it will occur, and some of those changes will be good and some less so. That's fine. It's what happens.

It's now up to the new board to make this close season feel positive for the fan base. No hyperbole, no over egging, no fantastical claims, just progressive competent steps that make sense, are clearly communicated and go to the aim of getting us as high up the table as possible while addressing our financial problems and new league status.

There are still some risks though, and I'm glad overnight and early this morning, some of them are being considered by others too. Thanks to exile for finding the holy grail of the share split. It's a very finely balanced structure. I'm keen to know if the investor pool which Quay currently represents is fixed or floating. That block looks crucial to future voting trends. And given Lee has nearly a third of shares in the investment vehicle, it's not all plain sailing.

I'd hope avenues are explored to dilute that holding if possible. If a simple majority allows a new share issue to be distributed without offering to every existing shareholder, or if that resides at an 80% controlling majority. If there is little hope for Conway and particularly Lee to influence or steer in the future, I suspect you could buy back the shares and redistribute more easily and more cost efficiently. But whatever happens, I think it's important we judge Quay and her investors on what we start to see going forward.

What would be a fantastic step is introducing another layer to the club structure. A layer of non exec directors (NED's) who are either all or largely local business people and fans. 4 or 5 would be enough covering wide ranging business disciplines. Hopefully given their love for the club they would give their time gratis and help shape ideas and sense check things before they see the light of day.

I think it would also be a fantastic opportunity to put a Barnsley fan on the board. I've mulled this over, and my initial instinct was someone from the BFCST. But I don't think that's right. I think the BFCST should be at arms length from the club and not directly within it. Someone independent with business acumen and experience, passionate about engagement, who loves the club and someone who's also just a really nice person and could command respect within the club and within the BFCST and the wider fan base. So my vote would go to wolvestyke (if he wanted it of course).

Financially, as above, I'd like that the first step to consider is neutralising Chien Lee's capital to minimise future risk of sway and hopefully that's underway. Additional capital would be my preferred initial route to stabilising cashflow. I'd rather it was ring fenced and we looked to clear the decks and generate as much of the cuts from player wages and hopefully getting some fees into the business. If we have to play kids and a few free transfers. I've no problem with that at all and completely supportive. I'd hope we can do better than that, but whatever we need to do to survive and rebuild, that's just the way it is and we might need to take a bitter pill in the short term.

In terms of coaching, I'm not as wedded to a name as others perhaps. I can see the want for a feelgood name and someone we know loved the club. I get that. It might work, it might not. I just want us to get back to playing a style that i enjoy watching (if I ever get the opportunity again) or at least be building towards that.

If a reds legend was in and around the setup, I think that would be brilliant. Batons need to be handed down through time. or even just getting involved through love of the club. A norman rimmington for the new age. Maybe we could find a place for Adam Hammill, if he wanted. I can't think of anyone better to carry on such a mantle.

The only other thing I'd want to ensure was the continued commitment to an academy or youth set up. On paper we could save considerable amounts. But this club is so much more than money. It's not built on money, irrespective of the last 4.5 years. We could save say £1m by not having a youth infrastructure. But then we'd lessen the ability to have ex players and young coaches cut their teeth. 100's of kids wouldn't come through our doors. And that doesn't feel right to me.

And so a new page.

James Cryne, Jean Cryne, Neerav Parekh, Julie Anne Quay. I wish you well. Rebuild our faith. And please, don't let us down.

 

i was just going to post this

@Not wanting to put a downer on things but Chien with having over 25 % of shares in the company can block any important changes from happening with his vote if he decides to and if he's got the monk on !!
i believe you need over 75% to pass any important changes
hence why they may have insisted the Crynes could only keep 20% in the initial deal ,so they couldn't block anything they wanted to pass.

but you are saying there's a way round this and they can dilute his shareholding ,and he cant stop this from happening ?

 

I'm going to assume simple majority voting rights exist in the HK parent company and Lee doesn't have veto. I can't see why they'd vote themselves off the board. For me any future danger is the "investor" group which now assumes what we considered to be PMG/Conways stake. Given we don't know the makeup of that block or their voting rights/abilities, I think we still have to be cautious as to whether that could flip again. It's flipped once, we have to be pragmatic that if wills and personnel change, so could power until it's not able to do so anymore.

I've diluted shareholdings before of more nominal shareholders, but I had an 80% controlling majority to do it. I don't know if you can do that at around 70% in the HK jurisdiction. I suspect we may find out in due course and see what happens to Chien Lee's stake.

 

I'm not sure he can block decisions in the ordinary day to day running of the club... had to look it up, but one solicitor suggests he can block 'Special resolutions'... eg adopting new articles of association or changing the company name.
"
The following are examples of matters for which a special resolution is required by the Companies Act 2006.amendment of the articles of association

• 
  
• changing the company’s name
  
  
• changing the country of registration of the company from Wales to England and Wales
  
  
• reduction of the share capital of the company, for example, in connection with the re-domination of shares
  
  
• disapplication of pre-emption rights by the directors of the company where there is only one class of shares; where the directors act in general authority; or by the directors to a specified allotment of equity securities or application with modification of an allotment
  
  
• re-registration of a company as a new type, for example, an unlimited company as a private limited company or a private limited company as a public limited company
  
  
• authorising certain off-market purchases by the company of its own shares, and varying, revoking and renewing that authority
  
  
• varying class rights
  
  
• using capital to pay for the redemption and purchase of the company’s own shares
  
  
• winding up the company, whether voluntarily, or by a court
  

These rights cannot be reduced or changed by any agreement between the shareholders."

 

Presumably he could also block things like external investment into the company be that a loan or someone wanting to put the money in?

 

didn't Loko say something about a 4 years expiration date in the contract for the directors (or something like that) , that meant they could to change or add directors after that timeframe ?
and this is the only time they could do it and reading between the lines of some of his other postings that they had been planning and waiting for the time limit to expire come around so they could execute this plan ?

 

The parent company he holds the shares in is in Hong Kong though. Given the UK's past relationship, I don't know what overhang there still is in terms of corporate law and regular share agreements and how closely they mirror UK law.

 

It mentioned in the club statement that an agreed term had lapsed whereby PMG (Conway) was acting for investors. Interesting that if it was a 4 year term, that lapsed in December 2021. It's taken another 6 months to get where we are. It's subjective opinion of course, but I suspect there has been some serious blood on the carpet in getting us to where we are today.

 

I've never particularly seen any great link between Chien Lee and Paul Conway other than this investment group.
It seems to me, that whilst PMG was fronted by Conway, Chien Lee was stumping up a big part of the cash. Lee has never really been a mouth piece for the club except just after the club was bought, and just before the playoffs last year, when there was interest being shown in our ownership model due to us outperforming expectation.
Perhaps Chien himself is unhappy with how his investment is being devalued and was also keen to leave the day to day running to those who understand it, rather than those who think they do?

I also think this may be why when Khaled says "you'd have to ask the owners" it wasn't so much a cop out as a way of disguising the rift between our shareholders.

 

These are the rules that apply to UK registered companies, but aren't the ones that will impact what happens to us. The shareholding of Barnsley Football Club Limited remains totally unchanged, in that it is 100% owned by BFC Investments Limited, a company registered in Hong Kong.

What matters is the rules that apply to the Hong Kong entity as to what changes can be made with a given % of shareholding. We've seen already that operational decisions on who sits on the Board of BFC (the UK entity) can be determined via a simple majority of the voting rights in the HK company. Matters such as dilution of shareholdings, issue of new shares are subject to Hong Kong rules that I doubt any of us will be familiar with.

One thing that is potentially in our favour is that the current shareholding frustrates the plans that Conway has previously expressed to have a club in Scotland. Perhaps he and Lee will choose to sell their individual shareholdings (from what we know, Lee has about 28% & Conway presumably has a proportion of the smaller PMG stake). If they want to pursue their ambition of destroying a Scottish club then, as far as I'm aware, it requires that they dispose of their shareholdings in BFC. These shareholdings, removed of their ability to influence the day to day running of the club, might be something that they both now look to relinquish.

 

When I did research years ago, I think Conway and Lee first interacted in the initial IPO of 7 days inn (which Lee was said to have co founded, though I believe one of the original investors strongly disputed the level of his involvement), Conway was involved at Oppenheimer & Co. So it does seem to be a relationship thats pretty well established, though we'll never know the specific ins and outs.

 

My guess is that the 80% ers...are rather brassed off that instead of making a push to build on last season and having a crack at getting their hands on the millions available in the PL, their chosen representatives have completely ballsed up by alienating the fan base and turning their Championship asset into a 3rd division pub team.

 

Reference to the 80%ers is no longer valid, as the unified voting within this group is no longer in existence (as this change couldn't have occurred if so).

The aggrieved parties here are Chien Lee, who has a 29.8% personal shareholding based on the info in Exile's thread, and Paul Conway who has a shareholding of between 0 and 27.5%, based on what we know about PMG's shareholding. We can rule out Conway holding more than 20.2% as they'd have been able to have avoided being voted off the board with a stake of that size.

It's probably better that we refer to them as something else now. If Conway/Lee doesn't work then an equivalent name would now be the <50%ers.

 

Maybe one of those banded about (anonymously) by those that set up the facebook group could now show their hand. Or was it just a smokescreen. To gather people to join. Genuine question btw. As I see an opportunity there for anyone willing to buy Lee's shares. As surely he'd want out now.

 

I don't see that he definitely would.
He might be content to see his investment revived by a better running of the club.

 

The real elephant in the room is we're still owned predominantly be people who saw us as an investment and a way to make profit. Without Conway and Lee, maybe that intent is watered down. Maybe it's altered. Maybe it's alive and well. We can only guess in the interim and judge by action over time.

What really does surprise me (though given the levels of incompetence and pettiness in the last 4.5 years, maybe I shouldn't be) is that supposedly seasoned business people (despite being chancers) made such a **** up with failing to protect their controlling interest.

 

Maybe that was the 1st hurdle and new ownership is around the corner. Maybe that is what the press conference is for on the 27th May, as generally you wouldn't call a press conference just to announce new directors of a company as this happens daily in all businesses.

Potentially new ownership group and management team announced at the same time?